Li Auto (NASDAQ:LI) reported second-quarter revenue above market expectations, although weaker-than-anticipated guidance for the third quarter overshadowed the result and sent the Chinese electric vehicle maker’s shares lower in premarket trading.
The company recorded a second-quarter loss per share of RMB1.49, slightly worse than analysts’ forecast for a RMB1.47 loss. Revenue reached RMB25.67 billion, exceeding the RMB25.07 billion consensus estimate.
Revenue nevertheless declined 15.1% from the same period last year, although it improved 11.7% compared with the first quarter.
Li Auto shares were down 1.3% in US premarket trading at 05:25 ET.
Vehicle deliveries decline as competition remains intense
Li Auto delivered 98,330 vehicles during the quarter, representing an 11.5% decline from a year earlier.
Vehicle sales generated RMB24.1 billion in revenue, down 16.7% year-over-year but 11.8% higher than in the previous quarter.
“Amid intense market competition and a major model refresh cycle, Li Auto remained the best-selling domestic automotive brand in China’s RMB200,000-and-above NEV market in the first half of 2026,” said Xiang Li, chairman and CEO of Li Auto.
The figures reflect the competitive pressures facing China’s electric vehicle industry as manufacturers introduce refreshed models and compete aggressively for market share.
Margins recover sequentially but remain well below last year
Li Auto’s vehicle margin stood at 9.4% in the second quarter, sharply below the 19.4% recorded a year earlier. However, it improved from 6.1% during the first quarter.
Gross margin followed a similar pattern, falling to 11.0% from 20.1% a year ago but recovering from 7.9% in the previous quarter.
Operating margin remained negative at 9.0%. That represented an improvement from the negative 13.0% reported in the first quarter but compared with a positive operating margin of 2.7% in the second quarter of last year.
Third-quarter revenue guidance falls short of expectations
Investor attention was primarily focused on Li Auto’s outlook for the current quarter, which came in substantially below analysts’ expectations.
The company forecast third-quarter revenue of between RMB26.6 billion and RMB28 billion, compared with a consensus estimate of RMB32.28 billion.
Li Auto expects to deliver between 95,000 and 100,000 vehicles during the quarter, representing year-over-year growth of approximately 1.9% to 7.3%.
While the second-quarter revenue beat and sequential margin improvement provided some positive signals, the cautious revenue forecast indicates that competitive pressures and the company’s ongoing model transition could continue to constrain near-term growth.